Servitization – demand for maximized uptime

Servitization – demand for maximized uptime

Research highlights gap between customers’ increasing demand for maximized product uptime and manufacturers’ ability to deliver it.

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  • 99% of manufacturers plan to invest in predictive analytics within the next 12 months to enable real-time proactive maintenance
  • 96% are going to invest in machine learning in the next 12 months
  • 95% are going to invest in AI over the next 12 months

Atlanta – Syncron, in conjunction with Worldwide Business Research (WBR), have released new research highlighting customers’ increasing expectation for maximized product uptime, and manufacturers’ current ability to deliver on this demand.

Macro-level economic, demographic, and technological trends are fueling an on-demand customer mindset where products should just work, repairs are prevented or made proactively, and service is instantaneous. This new mindset is driving a shift to servitization – where manufacturers transition from selling products to selling the output or value that products deliver.

The shift to a servitization-focused economy will put strains on many manufacturers’ often sub-optimized after-sales service organizations – the function that delivers service after the initial sale of a product. For decades, manufacturers have been focused on repair execution – repairing a product after it has already broken down – but today’s customers want products that work all the time. This is driving manufacturers to shift their focus from repair execution to dynamic repair prevention – or maximizing product uptime.

The research, conducted by WBR, is featured in a new research report, “Maximized Product Uptime: The Emerging Industry Standard.”

WBR and Syncron set out to gain a deep understanding of manufacturers’ ability to deliver on their customers increasing demand for maximized product uptime, surveying 200 original equipment manufacturers (OEMs), with respondents evenly split between the U.S. and European markets, as well as 100 equipment end-users.

“Maximizing product uptime is a critical milestone in a manufacturers’ journey to servitization,” says Gary Brooks, CMO of Syncron. “This research illustrates manufactures’ desire to close the gap between their customers’ growing expectations and what their after-sales service organizations can deliver today.  It’s exciting to see a growing group of industry-leading manufacturers completely reexamine their after-sales service operations and take the necessary steps to evolve from break-fix service models focused on repair execution, to a new paradigm focused on dynamic repair prevention and maximizing product uptime.”

Manufacturers are very clear on customers’ expectations for maximized product uptime, as 82% believe prospective customers would consider it in their future product purchasing decisions. And, end users and OEMs are aligned on this topic – 58% of manufacturers believe customers would be willing to pay more for service agreements that guarantee maximized product uptime, while 57% of end users indicated an uptime guarantee would be worth the extra cost.

Additional key findings from the research report include:

  1. Maximized product uptime is the future, and the future is now. Nearly 100% of end users indicated they want to see more OEMs offer service agreements that offer maximized product uptime, but only 33% of OEMs are offering this type of service contract today. OEMs must have the data to support this new way of doing business, and while more than 70% of respondents indicated that they are currently gathering data from sensor-equipped products in the field, only 25% are currently using this sensor data to support a service model based on maximized product uptime.
  2. Unprecedented customer demand is forcing change. More than 80% of end-users indicated that predicting part failure before it occurs is extremely important, while 67% said an OEM’s ability to use historical data to enhance new versions of products and equipment is also key.
  3. Manufacturers must overhaul infrastructure and resources to support maximized product uptime. The only way to maximize product uptime is to invest in the proper technologies and infrastructure that will support the new service model. More than half of OEMs plan to make AI and machine learning a major investment, while 90% intend to invest in predictive analytics within the next 12 months.

“This research highlights some of the biggest challenges facing manufacturers around the world,” notes Sara Mueller, field service portfolio director at WBR. “Today’s manufacturers are well aware of their need to evolve their after-sales service functions to meet their customers’ increasing demands for maximized product uptime. While a growing list of industry leaders take steps to implement the appropriate systems, technologies and resources to meet their customers’ evolving service expectations, the laggards reject the need for change and cling to the ‘status quo’ break-fix service model.”

Image courtesy of Syncron